Seagate Technology Lbo Term Sheet

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TERM SHEET
Private Equity Acquisition of Seagate Technology

This term sheet is intended to describe the general terms and conditions of a proposed acquisition of part of Seagate Technology.

Parties| Silver Lake Partners and Seagate Technology|
Transaction| Silver Lake will purchase (the “Transaction”) the disk drive business of Seagate Technology and $765 million cash| Transaction Price & Method of Transaction| The purchase price to be paid by Silver Lake to the Existing Shareholders will equal $3.888 billion, based on a multiple of 3.85x FY1999 EBITDA. The transaction will be fully paid in cash of $765 million.| Transaction Cost| The following transaction cost will be fully born by Silver Lake.

Advisory fees - 58 million, translating to 1.5% of transaction cost

Financing fees - 58 million, translating to 1.5% of transaction cost| Non-Compete| The Existing Shareholders will agree not to, directly or indirectly, enter into, encourage, assist, work, consult or own any interest in a competing business involving the

disk drive business for a period of 5 years following the Closing Date without the written consent of Silver Lake. The Existing Shareholders will also agree not to solicit any employee, customer or vendor of the Seagate Technology for such 1-year period.

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Re-employment of Executives| Stephen Luczo, the Chief Executive Officer and Charles Pope, the Chief Financial Officer will agree to remain in their current role in the company and convert a portion of their Seagate equity into new equity and deferred compensation of the company that would operate the disk drive business.| Intellectual Property Leasing| Following a 5 year period from closing, Seagate, with the written consent of Silver Lake, may lease its technology. Royalty rates will be determined based on market conditions at this point in time.| Closing Date| The Board of Seagate Technology has 30 days from the date on this term sheet to accept the...
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